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PRO Top Ideas
Top Ideas are high-conviction long or short ideas focused on market mispricings with asymmetric risk/reward profiles.
Flextronics: Solid Free Cash Flow Deployment And Cost Controls To Drive Further Upside
- At over 12%, Flextronics' free cash flow yield is the highest in its peer group.
- Tight cost controls are set to underpin expanding operating profit and margins.
- Flextronics has demonstrated a commitment to returning capital, having bought back almost 10% of the company in fiscal 2014 alone.
- The company's upcoming May 21 analyst and investor day will likely feature further updates on capital allocation and cost controls, which may drive further upside.
- Diversity of customer base may limit ability for short-term momentum rallies, but offers long-term stability.
American Airlines Group: As The Integration Continues, Solid Upside Ahead
- Despite leading the domestic airline industry in forward EPS growth, American sports the industry's lowest P/E multiple.
- Hundreds of millions of dollars in interest savings are set to flow through to the company's bottom line.
- American now has a lower cost structure cost than either Delta or United, yet receives little credit for it.
- Through Chapter 11, leverage has been reduced to industry-average levels.
- Conservative synergy targets create room for possible increases to the company's forecasts.
Lifetime Brands: A Mundane Company, With Exciting Profit Potential
- Lifetime's mundane business belies its profit potential.
- The company expanded gross margins during the key holiday quarter, alongside rising revenues and EPS.
- With insiders owning 22% of outstanding shares, capital is being deployed in an accretive fashion.
- Continued moves to enlarge brand portfolio and international presence will increase Lifetime's addressable market.
G-III Apparel Group: Unjustified Discount Belies Solid Execution And Opportunities Ahead
- G-III managed to not only grow revenues, EPS, and EBITDA in the holiday quarter, but posted rising gross margins across all segments.
- Despite solid performance in fiscal 2014, shares trade at meaningful discounts to peers.
- With management owning over 16% of outstanding shares, clear incentive to deploy capital in an accretive fashion.
Nexstar Broadcasting Group: In 2014, Its Star Will Continue To Shine
- Sizable pullback has created an attractive entry point in NXST.
- Balance sheet is stronger than a cursory glance suggests.
- Dividend increase in early 2014 suggests confidence in future cash flows.
- Kate Spade & Company: The Crown Jewel Begins To Shine, For Investors And Bidders
- Sonus Networks: Connecting Shareholders To Double-Digit Returns In 2014
- Air Canada: Finding Value With Our Friends To The North
- SoftBank: For Exposure To Alibaba, Look To Tokyo, Not Sunnyvale
- RF Micro Devices: A Return To Growth Set To Reward Shareholders
- Crédit Agricole: Farming Double-Digit Returns At France's Largest Bank
- TIM Participações: As The Chess Pieces Move In Europe, Double-Digit Upside In Brazil
- Regions Financial: Double-Digit Upside As Southern Recovery Continues
- Meaningful Upside Ahead As More And More Consumers Join The Devil In Wearing Prada
- Volaris: The Spirit Airlines Of Mexico Is Poised To Soar
- Pacific Sunwear: Finding Sunshine Amidst Teen Retail Gloom
- Tilly's: Reset Of Expectations, Favorable Valuation To Drive Recovery In 2014
- Children's Place: Child-Sized Clothes, Adult-Sized Potential
- Commtouch Software: A Return To Earnings Growth To Reward Investors
- Spirit Airlines: A Solid Derivative Play On The US Airways-American Airlines Deal
- Pericom Semiconductor: Recovering Business & Cash Deployment To Drive Upside
- Commerzbank: Substantial Value In Germany's 2nd Bank
- Christian Dior: A Better Way To Invest In Louis Vuitton
- Burberry: CEO Transition Offers Attractive Entry Point Into Long-Term Luxury Growth
- Lionsgate: Satiating Shareholders As The Hunger Games Approach
- The Royal Bank Of Scotland: Undervalued As Restructuring Moves Forward
- PDF Solutions: Profiting From Semiconductor Industry Growth
- easyJet: An Easy Pathway To Shareholder Returns
- Cascade Microtech: Undervalued Amidst A Global Semiconductor Recovery
- Aware, Inc.: Gains To Come As The Market Becomes Aware Of True Profitability
- SeaChange International: 40%+ Upside As Valuation Rises To Match Growth Prospects
- Keating Capital: Misunderstood, With Catalysts To Come In The 2nd Half